Ophthalmology Billing 101
Medical billing is the backbone of a healthy revenue cycle for any medical practice, regardless of specialty. An ineffective billing strategy can slow cash flow, increase the rejected claim rate, and ultimately lead to large revenue losses. According to the American Academy of Family Practices’ list of 10 Ways Practices Lose Money, five out of 10 had to do with the billing cycle, including “inaccurate and inadequate coding” and “bad billing practices.” Keep your ophthalmology practice’s revenue cycle healthy and growing with these basic strategies.
Develop a Collections Strategy
Health care reform has made it more difficult for physicians to maintain their revenue stream. According to Medical Economics, “getting paid” is the No. 1 challenge faced by physicians. The CDC estimates nearly 40 percent of Americans are on high deductible health plans now, shifting the financial burden from the insurer to the individual. Combine that with the fact that a $500 health bill is too much for many people to pay, and it’s easy to see why providers are struggling to balance patient needs with getting paid for their services. The solution is an effective collections strategy.
“Collections” is often associated with past due accounts. However, it should refer to the basic strategy of collecting funds, preferably before they are past due. Establish a step-by-step process that clearly outlines each phase of the collections process, and ensure staff are fully trained. Ensure your strategy includes the following.
- Put it in writing. Establish clear terms and give them to patients in writing. While most patients will not read all the legal jargon, signing a document that clearly states their financial responsibility adds a layer of accountability.
- Establish internal guidelines. The greater the debt, the greater the impact on your revenue stream. Define limits for “small balance adjustments” and “bad debt,” and guidelines for how staff should handle each. For example, you might determine that debts under $10 are not worth a lot of follow-up. These small balances could receive one statement. If unpaid, it can be written off. See a sample of a statement workflow in this recent blog post.
- Automate statements. View statements as your primary collection tool. It’s the main way you communicate with your patients. So, take a serious look at how they are sent, how often they are sent and their design. Fifty-two percent of patients prefer electronic billing, according to the Patient Payment Check-Up survey. Automating the statement process streamlines your workflow, gives patients what they want and portrays the image of a forward-thinking, patient-centered practice.
- Give payment options. The above survey found that 75 percent of patients would be willing to provide a credit card number for the provider to keep on file for automatic charges. Give options. Provide payment plans. Set up a payment link directly from the automated statement.
- Be an information source. Ophthalmology coverage can get complicated. For some patients procedures might be covered under their medical insurance. For others, they may need to purchase vision coverage. Many older patients may have Medicare and a supplemental plan. Helping them understand their coverage is mutually beneficial. Provide an estimate of their out-of-pocket before services are performed. The provider is more likely to get paid if the patient knows what is owed ahead of time, and the patient is likely to be left with a favorable impression.
Ensure You Have Reliable Reports
“Knowledge is power” is a cliché that certainly applies to billing management. You simply can’t manage a practice without knowing exactly where your revenue stream is at the end of each day. Do your financial reports always include a disclaimer? “This is missing.” “Today’s collections haven’t been applied yet?” If so, it’s time to get a billing management system that can provide you with real-time reports. In addition, train staff to follow these two best practices.
- Avoid using an “unapplied” account. Many practices use this account as a quick way to deposit funds that require a little more time and research to figure out what account they should be applied to. In addition to inaccurate reports, patients are likely to get statements that are not correct. Avoid using this account. If it’s necessary, establish protocols that ensure staff is working these unapplied credit balances each week. Additionally, having an effective billing management system will reduce the likelihood of needing to use the “unapplied account.”
- Reconcile each day. Reconciling on a daily basis is critical to monitoring cash flow and staying on top of past due accounts. In addition, it reduces the risk of embezzlement. While physicians hate to think of any of their staff stealing from them, Modern Medicine recognizes this as a very real risk, and recommends daily reconciliation as a prevention tactic.
One report found that 90 percent of small physician practices plan to outsource billing within two years. That prediction was made in 2014. Did it prove true? Well, the medical billing outsourcing marketing was valued at $6.3 billion in 2015 and is expected to reach $16.9 billion by 2024. It’s a trend that is staying. Why? Researchers explained, “Providers are facing challenges in managing flooding claims and reimbursements, resulting in huge losses.” New technology combined with increasing government compliance requirements, and growing uncollectible accounts have forced providers to look for solutions. Here are just some of the benefits of outsourcing.
- Reduced billing errors. Billing companies, such as Agnite, offer a 95 percent clean claim rate.
- Increased cash flow. Claims are submitted within 24 hours and payments are posted within 24 to 48 hours, giving you an accurate cash flow snapshot at the end of any day.
- Ensure government compliance. Rely on experts whose sole job is to keep up with today’s evolving health care industry.
- Reduced administrative time. Reworking denied claims costs $118 per claim. That’s just one task of the billing department.
- Improved patient care. Give providers more time to focus on patients instead of managing the billing process.
Agnite Health is a cost-effective outsourced billing company that offers complete solutions for ophthalmology practices. Contact us to learn more.